TPM Risk Management & Mitigation 2 — Questions and Answers
Question 1: A TPM identifies that a key engineering dependency has a 70% probability of causing a 3-week delay. The team decides to build a parallel workstream to reduce this risk. This is an example of which risk response strategy?
- Risk acceptance
- Risk avoidance
- Risk mitigation (Correct answer)
- Risk transfer
Correct answer: Risk mitigation
Risk mitigation involves taking actions to reduce the probability or impact of a risk, such as creating a parallel workstream to minimize schedule impact.
Question 2: When should a TPM use the 'risk avoidance' response strategy?
- When the risk impact is low and probability is minimal
- When the risk is so severe that the program cannot proceed if it occurs (Correct answer)
- When the organization has sufficient insurance or contracts to cover potential losses
- When the risk is within the project team's accepted tolerance level
Correct answer: When the risk is so severe that the program cannot proceed if it occurs
Risk avoidance eliminates the threat by removing its cause, appropriate when a risk is so severe that other strategies cannot adequately protect the program.
Question 3: A TPM signs a contract with a cloud provider that includes SLA guarantees and financial penalties for downtime. This risk response is best described as:
- Risk mitigation
- Risk avoidance
- Risk transfer (Correct answer)
- Risk acceptance
Correct answer: Risk transfer
Risk transfer shifts the financial or operational impact of a risk to a third party through contracts, insurance, or SLAs with performance penalties.
Question 4: What is a 'contingency plan' in risk management?
- A proactive action taken before a risk occurs to reduce its probability
- A predefined response to be executed if a risk event actually occurs (Correct answer)
- A budget reserve held to cover unforeseen project expenses
- A stakeholder communication plan for managing risk perceptions
Correct answer: A predefined response to be executed if a risk event actually occurs
A contingency plan is a pre-approved set of actions to be executed when a risk event actually occurs, enabling a faster and more coordinated response.
Question 5: A TPM decides to accept a low-probability, low-impact risk without taking any proactive action. This is called:
- Passive risk acceptance (Correct answer)
- Active risk acceptance
- Risk tolerance
- Risk appetite management
Correct answer: Passive risk acceptance
Passive risk acceptance means no action is taken proactively; the team simply deals with the risk if it occurs, appropriate for low-priority risks.
Question 6: Which of the following is a key element that should be included in a risk response plan?
- A list of all project team members and their HR performance ratings
- Risk owner, response strategy, trigger conditions, and action steps (Correct answer)
- Historical project data and past risk resolution timelines
- Stakeholder feedback from previous program retrospectives
Correct answer: Risk owner, response strategy, trigger conditions, and action steps
A complete risk response plan includes the assigned risk owner, chosen strategy, trigger conditions that activate the response, and specific action steps to execute.
Question 7: A TPM identifies a new risk that arises as a direct result of implementing a risk response action. This is called:
- A residual risk
- A secondary risk (Correct answer)
- A compounded risk
- A transferred risk
Correct answer: A secondary risk
A secondary risk is a new risk that emerges as a direct consequence of implementing a risk response action, requiring its own assessment and management.
TPM Risk Management & Mitigation 2
A TPM identifies that a key engineering dependency has a 70% probability of causing a 3-week delay.
The team decides to build a parallel workstream to reduce this risk.
This is an example of which risk response strategy?